Don't Trip Yourself up While Buying a New Home
Some new homebuyers make the mistake of rushing out to buy new things for their home soon after the seller says "yes" and the lender approves the loan. There still remain a few major hurdles to jump before closing. Below you'll find a list of actions to avoid during this critical time of your home purchase.
Don't overspend on big-ticket items Although you will be listing ways to turn your new home into a showplace, try to stay away from big ticket purchases like appliances, electronics, or furniture. We also recommend that you stay away from vacations and car purchases until the closing of your loan. Your credit numbers could change suddenly if you purchase new furniture using plastic. Because lending institutions are reviewing your bank accounts, a large cash purchase is also a mistake.
Don't go on a career search. Lending Institutions feel comfortable seeing a consistent career history on your paperwork. Finding a new career (especially one with a bigger salary) may not affect your ability to qualify for a loan. However, if you switch careers before you qualify, your loan process could fail or be stalled.
Don't move money around or change banks. Your lending institution will instruct the submission of recent bank statements on all of your accounts: savings, checking, money market, and other liquid assets. In order to eliminate fraud, lenders look for a consistent portrayal of how you earn your money and where additional money comes from. No matter the reason, changing banks or transferring funds could raise a red flag with your lender and slow down your qualification process.
Don't give cash directly to your seller (usually in cases of "for sale by owner") for earnest money. Your good faith money does not belong to the seller: it is actually yours until the sale closes. Although some FSBO sellers may not realize this, the good faith funds should be applied to your closing expenses. It's advisable to put the money into a trust account, or get a neutral party, like a lawyer, to hold it until closing. Your contract should indicate who keeps the deposit if the home purchase fails.
Team USA Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 218-237-5128.